Musings on a not so ‘nippy’ Saturday in Phoenix.

image: artur ciesielski

I long for the first days after the summer when the morning air will be nippy.  Summer is nice, but it’s time for it to pass and fall to come – alas there’s at least a month and a half of heat left, but maybe a nippy morning somewhere in there.  This Saturday sure was cooler after the previous days monsoon storms.

It was a nice morning for a bike ride to show a home in Windsor Square to someone interested in moving into the Central Phoenix from the suburbs.  It’s not the first such showing where 2,200-3,000 square feet worth of stuff needs to fit into a home of 1,200 square feet and where the large couch not flitting into the living room is the final decider.

It’s not unusual for us to show homes on bikes: not common though, but this Saturday was a nice day to do it. 

I combined the showing with taking photos of the metro light rail station for a series we’re doing at inPhoenix.com

The miles of cycling induce the inevitable pangs of hunger which were quelled by the breakfast offerings at Giant Coffee. 

What I liked is the fact that the breakfast burrito, though already prepared, was not warmed in the nutrition killing microwave, but the slower, yet much better, oven.  Together with a latte the cool interior provided a nice place to take some notes, watch the few people hunched over laptops and muse about the day, trying to fight of thinking about real estate yet again.

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They’re all away as we face Greek-style crisis

Immediate action needed on debt, but Dail won’t cut short holidays…

THE Government is to leave the political apparatus of the State on holiday throughout September — even though there is growing concern that the country could face a Greek-style crisis before the end of the year.

Widespread bewilderment was aroused in high finance circles last week by the publication of photographs of the Taoiseach, Brian Cowen, playing golf the day after Ireland’s sovereign debt was downgraded again.

In what is seen as an example of ill-judged timing, Mr Cowen played golf in Connemara on Wednesday with other seemingly carefree TDs and senators, who still have four weeks of a two-month summer break to go.

But while the Oireachtas is in repose, enjoying a longer than usual break, the financial markets are in overdrive and are now evidently training their sights on Ireland with the apparent intention of again testing the resolve of the EU later this year.

There is growing consensus among economic commentators here that, to counteract the threat, Ireland desperately needs to address the concerns of the markets between now and the end of September.

The markets’ concerns relate to the massive and seemingly open-ended debt burden being foisted on taxpayers by the Government in an attempt, effectively, to bail out the banks — primarily Anglo Irish Bank.

There is agreement among commentators that Finance Minister Brian Lenihan urgently needs to draw a definitive line on the cost of the Anglo bailout.

The markets are also awaiting a decision by the Government on whether it intends to extend the bank guarantee scheme; and, if so, to what extent and for how long. An announcement will not be made, however, until the day the Oireachtas comes off holiday.

A Sunday Independent/ Quantum Research poll, conducted on Friday, asked whether the Government should extend the bank guarantee scheme: 58 per cent said no, while 42 per cent said yes.

“It gets more and more damning and more and more worrying,” Brian Lucey, economics professor at Trinity College, Dublin, said on Friday. “Where is the Dail? On its bloody holidays? Where is the Government?” he asked.

Ciaran O’Hagan, an Irish economist who is head of rates research at Societe Generale in Paris, said measures to limit public debt and contingent liabilities were now needed.

On whether these urgent measures were required before the end of September, he said: “Bang on.”

But the Oireachtas will not be back off of its holiday until the end of next month.

The significance of the downgrade by the rating agency Standard & Poor’s is regarded as of minor importance, although it still has serious consequences.

An immediate consequence last week was that yields of Irish government debt rose sharply, at one point closing at its highest since the EU agreed a bail-out fund in early May when the entire euro project was under threat.

Last April, Standard & Poor’s decreased the Greek debt rating to the first levels of ‘junk’ status amid fears of default by the government there. Following that downgrading, yields on Greek government two-year bonds rose to 15.3 per cent as analysts questioned Greece’s ability to refinance its debt.

Last week, Standard & Poor’s also assigned a negative outlook to Ireland, citing substantially higher costs to support its struggling financial institutions.

The influential Financial Times, in an editorial last week, said: “It is time to staunch the bleeding. As Irish state guarantees near their expiry date, some banks will not be able to refinance their balances.

“The government should prepare insolvent banks for forced debt-for-equity swaps, which would instantly recapitalise the banks in question and cap the government’s exposure.

“This cannot be done frivolously; European institutions are exposed and EU partners must be consulted. But someone must put an end to the practice of handing banks blank cheques.

“Some Irish pluckiness would benefit us all.”

In the absence of out-front political leadership, it has been left to the Governor of the Central Bank, Dr Patrick Honohan, and the National Treasury Manager Agency chief executive, Jim Corrigan, to effectively defend policy.

On Wednesday, Mr Corrigan said Standard & Poor’s analysis was “flawed”.

Among economic commentators, there is some sympathy for Mr Corrigan’s argument; there is also widely held opinion that rating agencies should be held to greater scrutiny for their role in mis-rating many of the toxic assets at the centre of the international financial crisis.

Nevertheless, Ireland’s rating at three notches below the top, triple-A ranking has caused a further problem for the Government at a time when it is making plans for what will be a politically sensitive Budget.

Report by JODY CORCORAN – Sunday Independent

Ireland Property – Daft Property – http://daftproperty.blogspot.com

FORMER Taoiseach Bertie Ahern has pointed the finger of blame firmly at the bankers for the country’s economic problems in a new RTE series.

The TD is interviewed alongside economic heavy hitters former UK chancellor Alistair Darling, Central Bank Governor Patrick Honohan and Minister for Finance Brian Lenihan in the new series Freefall.

The programme investigates the banking system failures and the widespread collapse of the property bubble which fuelled the economic recession.

Bubble

Coinciding with the second anniversary of the controversial Government bank guarantee, the two-part documentary series tells the story of how a huge property bubble, fuelled by the lending practices of the banking system, brought the economy precariously close to the edge.

Former Chancellor for the Exchequer in Britain Alistair Darling said Europe must learn from the mistakes and that every part of society should take a portion of the blame.

“If we walk away from it, it will happen again and the next time it could be worse, really much, much worse,” he said.

However, Bertie Ahern paints a more black-and-white picture.

He said that the economic recession was due to failures in the financial institutions.

“They were bank mistakes, bank errors, bank regulations,” he said.

Mr Ahern said bank chiefs failed to give the government at the time a clear overview of what was happening.

“When we asked about those we got the glossy answer they were running their businesses well,” he said.

UCD’s Professor of Economics Morgan Kelly, who is known as the doom merchant for his ominous warnings about the state of the economy, revealed that he noticed that the upper levels of banking and governance were complicit in the recession.

“There is an Omerta, a code of silence in the upper reaches of Irish society that I somehow had violated,” he said.

Freefall airs on Monday, September 6 at 9.35pm on RTE 1.

Report – Claire Murphy – Evening Herald

Ireland Property – Daft Property – http://daftproperty.blogspot.com

Sellers need to be in constant communication, maintain the property and be prompt with providing information.

While the whole gamut of people in a short sale are important: the Realtor, Legal Counsel, Buyer, Investor, Servicing Co., the Seller is the key person.  

Without the full cooperation of the seller the prospects of completing a short sale are zero.  That means being prompt with providing information, providing all the necessary documents, communicating constantly, taking care of the property and simply being part of the process.

This is not like a foreclosure where you think you can simply walk away and others will clean up after you.  You have many responsibilities and they are not completed until the home has transferred ownership.  

There are sellers that start the process and don’t provide documents on time, don’t make the effort to return vital calls and requests and neglect the property: these are the failed short sales that eventually end up as foreclosures when that is truly unnecessary.

There is a lot of hurt when one has to do this: the short sale.  It’s easier to simply let go to put the painful event behind us.  Truly, the extra time you put into this process will be worth the effort.  Some sellers who don’t neglect paying the mortgage and do a short sale are able to purchase again quickly if they choose so there are benefits to a short sale over a foreclosure, even beyond how it benefits you individually.

It’s understandable that some sellers lack funds to give the property it’s fullest attention, but at a minimum the utilities need to be turned on and the cleanliness and safety maintained.   These don’t take much money.  

If you were advised by legal counsel and your CPA that a short sale is the best course of action then it is to the seller’s benefit to do it properly.

In other words, if you don’t want to do anything, but wash your hands of the property, don’t even bother starting the short sale.

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The Metro is an insane idea — and a disaster for Dublin…

We’ve been bombarded with cataclysmic figures for the past two years, all of which related to financial obligations caused by our past blunders. Many of you were clearly unaware that the Metro represents an entirely voluntary leap into a fresh and cataclysmic debt that could bring disaster to Dublin.

Now, no one would back a plan to build a huge coal-fired power station that had been conceived before global warming. So why is this technically bankrupt State hoping to build an underground rail link from St Stephen’s Green to Dublin Airport which was conceived before the financial meltdown?

We are borrowing €20bn a year merely to run the State and to pay civil servants’ salaries and pensions. And yet we still propose to build the Metro?

This is not rational behaviour, but akin to the conduct of an alcoholic who has foresworn alcohol totally — apart, that is, from the open-ended credit-card account with Tesco wines, beers and spirits.

Tens of thousands of people are repaying mortgages that are vastly greater than their homes are worth. Unemployment is rocketing, as entire swathes of the secondary economy — restaurants, shops, taxi companies, solicitors — are collapsing.

Yet the Government, nonetheless, determinedly proceeds with the most expensive infrastructural project in the history of the capital.

Official estimates for the Metro declare that it will cost €5bn. Is this figure as much value as government estimates for earlier projects?

The Dublin Port Tunnel went from an estimated cost of €220m in 2000 to €580m in 2002, then to a final cost of €789m — some 350pc of the original estimate. The M50 widening increased from €190m to €560m: 300 pc of the estimate. The Luas went up from €290m to €750m.

So all government predictions are in the realm of how long is a piece of string?

Therefore, allowing (modestly) that the Metro will probably cost 300pc of the original estimate, the final bill will be about €15bn. But this is not even like squandering money on a greenfield site in north county Dublin. No, the project requires a series of major assaults on the streetscape of Dublin and on the already-bleeding commercial centre around Grafton Street.

Sit down, while you read what is being proposed: a vast underground station beneath St Stephen’s Green. This will require the destruction of the Green, the felling of its trees and its probable closure for two years. During this time, the removal of waste from beneath the Green will require 400 lorry movements a day through the city-centre’s narrow streets to some dump in the greater Dublin area. And which lucky rural community will be the beneficiary of these thousands of lorries a week, unloading millions of tons of spoil a year?

This would have been barking at the height of the boom: but now we are borrowing nearly €60m a day to keep the State going, it is the kind of insane and Gothic fantasy that Hitler might have entertained as the Soviet tanks were rolling towards the fuehrer-bunker.

For at no point does the Stephen’s Green scheme touch reality in terms of the commercial needs of an already crippled city centre, the actual transport requirements of airline passengers or what is financially possible for the Irish State.

NOW, I don’t think that the civil-service mandarins who are backing the Metro scheme (along with the Greens, who are, of course, actually clinically mad) are doing so because they are consciously thinking of their own personal needs. But it’s hard not to conclude that a huge collective unconscious is driving this desire to locate the transport hub at the very heart of the civil service. For nobody lives in St Stephen’s Green (apart from guests in the Shelbourne Hotel, to which we can probably wave a fond farewell). Otherwise, there’s no reason to make it THE underground hub for the Dart and Luas lines.

A rival hub — where Dart and Luas and buses and mainline rail all converge — already exists, although it is where almost no senior civil servant could find it, even on the map — for it’s north of the Liffey, at the Store Street-Amiens Street junction.

Further official figures will presumably be trotted out to justify the Metro, but most of these are soviet in their meaninglessness.

For example, the National Roads Authority — those fine fellows who have just built a thousand miles of motorway without a single petrol pump — routinely finish their projects ahead of their own schedules. Well, if you asked the NRA planners what time a rugby match will end, they’ll invariably say: “Oh, about four hours after kick-off” and then be acclaiming themselves at the “early” whistle. So despite recent and very selective NRA claims, virtually all traffic flow is falling dramatically across the State.

The statistical projections which made the Metro notionally viable (and only then in the hallucinogenic fantasies of officialdom) are now as meaningful as Chad’s military designs on Nebraska.

“Metro”, means “mother” and “-polis” means city: “metropolis” therefore means “mother of the city”. But if this insane scheme goes ahead, this underground line will probably be called “Necro”.

Article by Kevin Myers – Irish Independent

Ireland Property – Daft Property – http://daftproperty.blogspot.com

A beautiful suburban Phoenix community with the charms of a small town and amenities of a metropolis.

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Low prices, low interest rates, lots of choices and motivated sellers; it’s like a dream.

This is seemingly the best time to purchase a home, a confluence of many factors making almost silly not to make a move into real estate.  For investors its a smorgasbord with rents exceeding mortgage payments and for home buyers it’s often less expensive to buy then rent.

The prices are well below what they should be: we’re in a mode of overcompensation after the huge run up mid decade.  Prices are often near 1994-2000 levers and I’ve seen some good homes at 1980’s levels.  Banks want to offload properties and short sellers need to get out soon and the normal sellers have to play along.  Prices are exceptionally low.

Interest rates are at 40 year historic lows and there is a build up of debt which can lead to inflation in the future, a highly likely scenario.  Even an increase in rates of 1% means tens of thousands of additional dollars for interest.  At 4.5% interest the money is almost free.  

People should be drooling at the opportunity, so why are more homes not selling?  Jobs!  With official unemployment near 10% and the real unemployment by some accounts exceeding 20% how can they get on this ‘best time to buy now’ bandwagon.  It’s no wonder some 40% of sales cash and by investors, the pool of renters is growing.  It’s all about the jobs.  No more incentives to buy homes, please.  Just get the jobs going.

See Also

• Phoenix Home Search | MLS Properties For Sale | MLS Wizard
  If you can buy – search Phoenix homes.
• Home Buyer’s Guide
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Low prices, low interest rates, lots of choices and motivated sellers; it’s like a dream.

This is seemingly the best time to purchase a home, a confluence of many factors making almost silly not to make a move into real estate.  For investors its a smorgasbord with rents exceeding mortgage payments and for home buyers it’s often less expensive to buy then rent.

The prices are well below what they should be: we’re in a mode of overcompensation after the huge run up mid decade.  Prices are often near 1994-2000 levers and I’ve seen some good homes at 1980’s levels.  Banks want to offload properties and short sellers need to get out soon and the normal sellers have to play along.  Prices are exceptionally low.

Interest rates are at 40 year historic lows and there is a build up of debt which can lead to inflation in the future, a highly likely scenario.  Even an increase in rates of 1% means tens of thousands of additional dollars for interest.  At 4.5% interest the money is almost free.  

People should be drooling at the opportunity, so why are more homes not selling?  Jobs!  With official unemployment near 10% and the real unemployment by some accounts exceeding 20% how can they get on this ‘best time to buy now’ bandwagon.  It’s no wonder some 40% of sales cash and by investors, the pool of renters is growing.  It’s all about the jobs.  No more incentives to buy homes, please.  Just get the jobs going.

See Also

• Phoenix Home Search | MLS Properties For Sale | MLS Wizard
  If you can buy – search Phoenix homes.
• Home Buyer’s Guide
  A guide to buying in Phoenix.

Big move is abroad as market stagnates…

MASS EMIGRATION may be an unwelcome throwback to the past for many Irish people but for the removals industry the growing exodus of workers to far-flung destinations means business is booming once again.

Some of the sector’s largest firms are reporting dramatic increases in the numbers of people moving lock, stock and barrel to Australia, Canada, New Zealand and the UK. Most of these migrants are families who have cut their losses on property at home or are renting out their homes in the expectation of a return in three to five years’ time.

Last month, a report from the EU Commission showed more people were leaving Ireland than anywhere else in the European Union and commentators attributed these rising emigration levels to departing non-nationals and young Irish males in search of better job prospects.

But according to Eamonn Finn, of Allen Removals, the “overwhelming majority of clients are Irish families who have decided to move overseas permanently” to escape the deepening economic crisis at home. He claims he is moving five to six families a week and says more than 80 per cent of his business is now focused on “deep-sea shipping”.

It’s a radical turnaround from the halcyon days of the Celtic Tiger, when spiralling property prices meant overseas removals was a niche business.

Now it’s “our bread and butter” says Finn. “It’s not a business we would have chased in the boom times,” he says, but he concedes the resurgence in emigration has delivered a valuable lifeline to an industry that threatened to go the way of many other property-related companies .

Although the company has reduced its workforce, it is still going and, Finn claims, “we would have gone to the wall” without the rise in migration.

Aubrey McCarthy, managing director of AMC Removals and Storage, tells a similar story. “During the property boom, about 80 per cent of our business was in the domestic market and about 20 per cent was in exports. That situation has been completely reversed.”

He maintains the sharp increase in families leaving the country – AMC moves an average of seven families a week – has driven up profits at the firm and led him to expand his fleet.

Demand for storage has also jumped. According to McCarthy, many families will “put their furniture into storage and rent out their homes” before committing to a more permanent move. “We do have some clients who like to get a feel for a country first.

“They usually wait for three to six months and then ship out their furniture.”

But Deirdre Fitzgerald of Move Masters, a company that specialises in international relocations, warns that not all families find the grass greener on the other side of the world. While overseas removals now, in the wake of the property market crash, account for 85 per cent of her firm’s business, she points out that “two out of every five clients” decide to return home within a year of moving.

Moving to Australia causes the most serious adjustment problems, according to Fitzgerald, “The Irish tend to regard Australia as an easygoing country, with good weather and a booming jobs market.

“Then when they get there they discover the cost of living is too high, many of them end up double-jobbing and then return disillusioned. Unfortunately it means these families bear the cost of moving twice in a short period of time and of course they go through the trauma of moving children from one side of the world to the other and back again.”

McCarthy concedes that some families find the relocation to Australia and Canada – the two most popular countries for emigrants – “stressful” but points out that “today’s migrants are very different to “the panicked people” forced to leave in the 1970s and 1980s. “Back then,” he says, “many fled to New York and the UK with little more than a suitcase, whereas these days people are going further afield, they’re more educated and they’re wealthier because they have either sold or are renting out property here.”

While many may feel sad at this growing exodus, a return to the Celtic Tiger era, when mass emigration looked like it had been consigned to the history books, looks unlikely. A report issued by the Economic and Social Research Institute last month predicted up to 200,000 people will have left these shores by 2015.

Report by Gretchen Friemann – Irish Times

Ireland Property – Daft Property – http://daftproperty.blogspot.com